RTX
Raytheon Technologies Corporation
Industrial/Transportation, Event Driven/Special Sit
08/20/2018
Presented
| Date | 08/14/2018 |
| Price | $83.34 |
| Market Cap | $66.68B |
| Ent Value | $80.06B |
| P/E Ratio | 20.87x |
| Book Value | $39.20 |
| Div Yield | 2.11% |
| Shares O/S | 800.09M |
| Ave Daily Vol | 3,641,278 |
| Short Int | 2.05% |
Current
| Price | $125.03 |
| Market Cap | $166.32B |
| Raytheon Technologies Corporation, an aerospace and defense company, provides advanced systems and services for commercial, military, and government customers worldwide. It operates through four segments: Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. The Collins Aerospace Systems segment offers aerostructures, avionics, interiors, mechanical systems, mission systems, and power controls that serve customers in the commercial, regional, business aviation, and military sectors. The Pratt & Whitney segment designs, manufactures, and services aircraft engines and auxiliary power systems for commercial, military, and business aircraft. The Raytheon Intelligence & Space segment engages in developing various sensors, training, and cyber and software solutions. The Raytheon Missiles & Defense segment provides various advanced end-to-end solutions to detect, track, and engage threats. The company was incorporated in 1934 and is headquartered in Waltham, Massachusetts. |
Please note, on 04/03/20 United Technologies (UTX) and Raytheon Company (RTN) merged to create a new entity, Raytheon Technologies Corporation (RTX). As this was originally a UTX idea, presented data has been adjusted accordingly. The content of this idea will make reference to the original company name and ticker symbol.
Publicly traded companies mentioned herein: Boeing Co (BA), Honeywell International Inc (HON), Rockwell Collins Inc (COL), Rolls-Royce Holdings PLC (RR/ LN), Safran SA (SAF FP), Schindler Holding AG (SCHN SW), Kone OYJ (KNEBV FH), United Technologies Corp (UTX)
Highlights
The presenter is long shares of United Technologies Corp (UTX) and sees upside for patient shareholders based on management decisions to unlock value this year. He likes the setup with the stock trading in the low $130s because CEO Greg Hayes and CFO Akhil Johri have been clear that the team is discussing a variety of options to breakup of the company, and a decision is expected by year’s end. Most industrial conglomerates’ stocks trade at a 10% - 15% discount to a reasonable sum-of-the-parts (SOTP) value based on market multiples for the segments; however, with UTX stock trading “at least" 30% below fair value, the discount is too steep given the businesses it operates and a near-term catalyst. For example, Pratt & Whitney’s geared turbofan (GTF) engine program appears to be “fundamentally misunderstood” by many investors and Street analysts, and separating it from Otis elevators and/or Climate, Controls & Security (CCS) could allow the Aerospace segment’s true value to be unlocked.
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